Maersk wants GPPL share price lowered

MUMBAI: Maersk Sealand, the world's largest container shipping line, has demanded a reduction in share price for picking up an additional 13% stake in Gujarat Pipavav Port , India's first private sector port.

The AP Moller Group of Denmark, the owners of Maersk seraland, has decided against exercising the option of picking up a further 13% stake, the deadline for which expired on June 30, 2002.

That option was to pick up a stake at around Rs 80. The equity infusion would have contributed to funding of a container terminal at Pipavav.

"With the collapse of international capital markets, this obviously was no longer attractive," said Thomas Dyrbye, managing director of Maersk India, in a reply to the Economic Times. Maersk had picked up a 13% stake in GPPL for Rs 70 in June 2001, and had taken over the operational management control of the port.

Subsequent to Maersk's entry, the earlier strategic investor — Port of Singapore Authority had decided to remain a sleeping partner in the project, paving the way for Maersk.

Maersk had also put in place a plan of Rs 800 crore to develop GPPL as a major container terminal. This included dredging up to 16.5 m draught in order to accommodate new generation vessels, and setting up other cargo-handling infrastructure.

Sources said all shareholders, including the Indian financial institutions such as UTI and IDBI, are meeting in the second week of August to discuss the financing of the container terminal at Pipavav.

Indian financial institutions, including IDBI and UTI, which have a huge exposure in GPPL, has demanded Maersk put in its equity stake before they disburse more funds.

IDBI had sanctioned Rs 400 crore for the development of the container terminal, which Rs 120 crore has already been drawn.

Rail connectivity, the absence of which had affected port activities, is now expected to be a reality by early 2003. Sources said it would help improve the existing bulk and container operations of GPPL.

However, its container terminal expansion project, if re-started without any further delay, would take around two years to complete.

GPPL's other stakeholders — NewYork Life, AMP, UTI and Seaking Infrastructure, are in favour of enhancing the paid-up capital, currently at Rs 160 crore, to Rs 210 crore.

The initial promoters Seaking Infrastructure, which currently holds 39%, is also likely to infuse funds. Dyrbye claimed AP Moller Terminals and Maersk Sealand found the project very attractive.